How to Increase Sales with Chatbots

By Andreas Rivera, Writer November 15, 2017 04:31 pm EST

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Machine learning is one of the year's buzzworthy technologies, with several applications of it showing tremendous potential to change nearly every industry. Most consumers will encounter this technology through chatbots. Chatbots are proving to be fun, digital toys for the programmers, but they're also a boon to businesses using them to supplement human customer service and increase sales.

A chatbot is basically an artificially intelligent system that you interact with via text. Online businesses have been using these for various customer service functions for quite some time. It's common now to see a chat button on the bottom corner of a website that opens a chat window to a chatbot.

These are typically rules-based programs that respond to certain words and phrases with a preprogramed reaction or message. They have a specified and simple structure, much like a phone tree, and for customer service purposes, will usually hand users off to a human representative after it gathers some basic information.

More advanced chatbots use machine learning to create a more authentic, personalized user experience. Those programs developed with machine learning can make more informed and less robotic responses. They can consider language, context and past interactions before answering.

Machine learning occurs when a program can create new responses to new input that wasn't originally programed, using past data to draw those conclusions. A machine-learning chatbot can be programmed to give a friendly greeting when an individual types in a programmed greeting like "hello." If a user types a word or phrase that the chatbot wasn't originally programmed with, it can analyze the phrase with past data and interactions to determine that it is another greeting. [Read related article: What is Machine Learning?]

Better chatbots improve customer relations by delivering high-quality service that users can access without having to wait. According to AppInstitute, chatbots can be used to increase lead generation, perform marketing strategies and conversational surveys, schedule reservations and provide users with quotes.

Many businesses have these advanced chatbots on their websites, but they can also be deployed to major messaging apps such as Facebook Messenger and Slack. You can use Facebook's own platform to create a chatbot, or you can go through a third party such as Flow XO or Botsify.

Head of research and development for Devexperts Evgeny Sorokin says using chatbots on messaging apps is a great opportunity to reach out and engage customers, since they're already heavily used and there's no requirement to download a separate app.

"And this way has specific benefits: Users don't have to install anything, grant permissions or do anything which lets them think twice before doing. They just type in a question, get what they were looking for and move on. So businesses have an opportunity to piggyback and reuse the communication channel their users already employ," Sorokin said. "Chatbots are becoming a niche channel to convert, activate and engage clients. The natural way is to feed clients with content mixed with ads or call to action to close the deal."

According to CEO of SF AppWorks, Andrew Greenstein, there are three common uses for this type of chatbot in ecommerce.

The personal curator chatbot helps customers find the perfect product they're looking for. Instead of browsing products on a website, users tell the chatbot what they are specifically looking for and the bot can, in turn, ask questions to narrow down the search. Many chat programs have interfaces that allow users to buy products in the app.

The in-store chatbot assists customers at brick-and-mortar locations when staff is limited or very busy (think Black Friday). Customers can text or message the bot from their phone, with the phone number provided around the store.

Customer service chat bots handle the hundreds of customer service requests companies get. These bots can tackle most service calls from start to finish, providing information, tracking deliveries and performing automated changes to orders.

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Greenstein advises that rather than building an all-in-one chatbot that does all of these things, it's always better to design chatbots for one specific task. Instead of one chatbot that does everything with subpar results, create multiple, focused chatbots that deliver high-quality results.

"Businesses all over the world are leveraging chatbots as an effective consumer touchpoint. Consider bots employed by the likes of Tommy Hilfiger and Whole Foods Market. Both drive hundreds of conversations without the need [for] human interference," Yogesh Jain, founder of ConceptAllies.

"AI chatbots have the potential to empower the ecommerce industry in multiple ways," said Jain. "They can automate conversations relating to customer service, product suggestions, trend alerts, etc. The beauty of AI chatbots lies in the fact that they don't need to be hard-coded for every response."

Machine-learning chatbots sound complicated to make, but fortunately for online businesses, there are dozens of chatbots online that you can buy and integrate into your online presence. Chatfuel is a chatbot for Facebook Messenger that you can program with commerce features and other specific features, such as checking reservations, media players and event notifications.

South American insurance company elMejorTrato implemented a chatbot using Google's TensorFlow platform and were able to fully automate 76.9 percent of their customer service queries, CEO Cristian Rennella said. This also resulted in a 21.5 percent increase in sales since deploying the chatbot.

According to Greenstein, this simplification of interface will continue, with voice-only chatbots already appearing in the form of Amazon Echo and Google Home. As machine-learning becomes more sophisticated, digital customer representatives that are indistinguishable from humans, both online and in-store, are not far away.

Andreas Rivera

Andreas Rivera graduated from the University of Utah with a B.A. in Mass Communication and is now a staff writer for Business.com and Business News Daily. His background in journalism brings a critical eye to his reviews and features, helping business leaders make the best decisions for their companies.